That's just how it is with 'good girls', as I dimly recall from my long-lost youth. But dragging myself away rather reluctantly from putative sex to finance, let us consider that very good girl, indeed, Angela Merkel. She keeps saying 'no' to allowing anyone to slide their hands up the skirts of the German tax-payers but the pressure is inexorable. I suspect that she knows this perfectly well and is simply biding her time so that on the very eve of financial Armageddon she can turn to her people and claim that she had fought the good fight but now, to quote a phrase from another blonde, "there is no alternative"!
According to Stefan Kaiser in der Spiegel, Europe is 'squidged'! Some of you may be unfamiliar with this somewhat technical, financial expression but it means that it is flat on its back on an exceedingly hard, concrete floor and someone is driving over it with a steam-roller! You see, nobody, but nobody, is willing to buy European national debts, least of all the usual buyers, the European banks because they already own zillions of them having in the past given in to the importunings of politicians, probably waving national honours and medals under their directors' silly noses to help make their minds up for them! All these zillions of bonds are now worthless and the banks are finding out the hard way how manyof their hard-up customers felt when their overdrft was suddenly cut off. Anyway, because the European banks are standing there with their trouser pockets pulled inside out and a helpless, hapless expression on their mugs, none of them will lend money to the others. I need hardly say that American and British banks have also let it be known that they are staying well clear. But banks absolutely depend on inter-bank lending to keep going. So the European banks have told their governments that there is now no way they will buy any national bonds, and the international bond dealers, like Pimco, long ago said the same. The European Central Bank (ECB) has, like a faithful hound, stretched its German dog-lead as far as it is allowed to go, not far enough, and has tried to buy up some bonds but yesterday's sale of Spanish 3-month and 6-month bonds, normally an easy pitch, was only cleared at murderous rates of interest.
It is now only a matter of time, and I suspect (and you all know of my personal, and disasterous, history of financial acumen-not!) it is only a matter of weeks, perhaps before Christmas, that the first bank goes belly-up. That will be the pebble that sets the landslide into destructive motion, and that will also, I guess, be the point at which the 'iron chancellor' puts her euros on the table and says 'yes'. They all do in the end you know!
ADDITIONAL: Don't ask me why but my bet (if I had any money!) would be on a French bank going first.
ADDITIONAL#2: Gott in Himmel! This from The WSJ:
A German government debt auction drew some of the weakest demand since the introduction of the euro, signaling diminishing investor appetite for even the safest euro-zone assets amid Europe's worsening debt crisis. [...]
Wednesday's failed auction spooked investors, however, sending bund yields, which move inversely to price, soaring above 2%. The failed auction suggests that investors aren't interested in new issuance with such low returns. The low take-up may also reflect concern that Germany may end up having to accept the adoption of common European bonds to resolve the debt crisis. [...]
Meanwhile, back in 'plucky little Belgium':
Adding pressure were reports that Belgium cannot pay its agreed share of the planned rescue of the Belgian-French bank Dexia SA, which is seen as placing more risk at the door of the French Treasury and adding another threat to the country's triple-A credit rating.